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Human Capital, Mortality and Fertility: A Unified Theory of the Economic and Demographic Transition

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  • Cervellati, Matteo

    () (University of Bologna)

  • Sunde, Uwe

    () (University of Munich)

Abstract

This paper argues that accounting for the dynamic interactions between endogenous changes in longevity, the education composition of the population, and the associated fertility differential is crucial for understanding the economic and the demographic transition. In the model, heterogeneous individuals make optimal decisions about fertility, education of their children and type and intensity of investments in their own education. The interplay between different dimensions of mortality, and education and fertility decisions delivers a phase transition that replicates stylized facts that previously have been difficult to reconcile. Simulations illustrate the model dynamics and their consistency with historical and cross-country data.

Suggested Citation

  • Cervellati, Matteo & Sunde, Uwe, 2007. "Human Capital, Mortality and Fertility: A Unified Theory of the Economic and Demographic Transition," IZA Discussion Papers 2905, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2905
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    Cited by:

    1. Matteo Cervellati & Uwe Sunde, 2011. "Life expectancy and economic growth: the role of the demographic transition," Journal of Economic Growth, Springer, vol. 16(2), pages 99-133, June.
    2. Raouf Boucekkine & Rodolphe Desbordes & Hélène Latzer, 2009. "How do epidemics induce behavioral changes?," Journal of Economic Growth, Springer, vol. 14(3), pages 233-264, September.
    3. Claude Diebolt & Faustine Perrin, 2013. "From Stagnation to Sustained Growth: The Role of Female Empowerment," American Economic Review, American Economic Association, vol. 103(3), pages 545-549, May.
    4. Holger Strulik & Jacob Weisdorf, 2008. "Birth, Death, and Development: A Simple Unified Growth Theory," Discussion Papers 08-32, University of Copenhagen. Department of Economics.
    5. Sebnem Kalemli-Ozcan, 2012. "AIDS, “reversal” of the demographic transition and economic development: evidence from Africa," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(3), pages 871-897, July.
    6. Dimitrios Varvarigos & Intan Zanariah Zakaria, 2011. "Growth and Demographic Change: Do Environmental Factors Matter?," Discussion Papers in Economics 11/46, Department of Economics, University of Leicester.
    7. Dimico, Arcangelo, 2014. "Poverty trap and educational shock: Evidence from missionary fields," QUCEH Working Paper Series 14-07, Queen's University Belfast, Queen's University Centre for Economic History.
    8. Daniel Mejía & María Teresa Ramírez & Jorge Tamayo, 2008. "The Demographic Transition in Colombia: Theory and Evidence," BORRADORES DE ECONOMIA 005128, BANCO DE LA REPÚBLICA.
    9. Claude Diebolt & Faustine Perrin, 2017. "A Cliometric Model of Unified Growth. Family Organization and Economic Growth in the Long Run of History," Working Papers of BETA 2017-03, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    10. Ricci, Francesco & Zachariadis, Marios, 2009. "Longevity and Education Externalities: A Macroeconomic Perspective," TSE Working Papers 09-009, Toulouse School of Economics (TSE).
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    12. Alexander Stimpfle & David Stadelmann, 2016. "Marriage Age Affects Educational Gender Inequality: International Evidence," CREMA Working Paper Series 2016-02, Center for Research in Economics, Management and the Arts (CREMA).
    13. Kiyoka Akimoto, 2018. "Corruption, Mortality and Fertility Rates, and Development," Discussion Papers in Economics and Business 18-10, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
    14. Hung-Ju Chen, 2010. "Life expectancy, fertility, and educational investment," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(1), pages 37-56, January.
    15. David de la Croix & Omar Licandro, 2015. "The longevity of famous people from Hammurabi to Einstein," Journal of Economic Growth, Springer, vol. 20(3), pages 263-303, September.
    16. Strulik, Holger & Weisdorf, Jacob, 2010. "How Child Costs and Survival Shaped the Industrial Revolution and the Demographic Transition: A Theoretical Inquiry," Hannover Economic Papers (HEP) dp-442, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    17. Strulik, Holger & Werner, Katharina, 2012. "Life expectancy, labor supply, and long-run growth: Reconciling theory and evidence," Center for European, Governance and Economic Development Research Discussion Papers 141, University of Goettingen, Department of Economics.
    18. Sascha O. Becker & Francesco Cinnirella & Ludger Woessmann, 2012. "The effect of investment in children’s education on fertility in 1816 Prussia," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 6(1), pages 29-44, January.
    19. Laura Leker & Gregory Ponthiere, 2015. "Education, life expectancy and family bargaining: the Ben-Porath effect revisited," Education Economics, Taylor & Francis Journals, vol. 23(4), pages 481-513, August.
    20. Chinhui Juhn & Sebnem Kalemli-Ozcan & Belgi Turan, 2013. "HIV and fertility in Africa: first evidence from population-based surveys," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(3), pages 835-853, July.
    21. Kendzia Michael J. & Zimmermann Klaus F., 2013. "Celebrating 150 Years of Analyzing Fertility Trends in Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 233(3), pages 406-422, June.
    22. Dierk Herzer & Holger Strulik & Sebastian Vollmer, 2012. "The long-run determinants of fertility: one century of demographic change 1900–1999," Journal of Economic Growth, Springer, vol. 17(4), pages 357-385, December.
    23. repec:got:cegedp:141 is not listed on IDEAS

    More about this item

    Keywords

    demographic transition; endogenous life expectancy; child mortality; heterogeneous human capital; technological change; long-term development; industrial revolution;

    JEL classification:

    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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